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tv   Whatd You Miss  Bloomberg  October 1, 2021 4:30pm-5:01pm EDT

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♪ romaine: from bloomberg world headquarters in new york, i'm romaine bostick. sonali: i'm sonali basak. katie: and i'm katie greifeld. romaine: this is from just a few minutes earlier, president joe biden going to meet with house democrats to try and broker a deal between moderates and progressives in this party that would potentially break a stalemate over his economic agenda. the disagreement is holding up a
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vote on infrastructure legislation and a broader vote on proposed multi trillion -- trillion dollar spending. investors and businesses keeping a close eye specifically on how these tax plans might actually be affecting us. sonali: we will start by getting an update from capitol hill with our chief political correspondent, annmarie hordern. what are you hearing? >> the president is still in the meeting. he is likely taking questions from the group, as one representative put it, the president does not come to the capitol to conduct talks, he comes here to close a deal. they are making sure they are on the same page so they can push through the economic agenda.
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this all lies between the progressives of the party, which he is the head of, and the moderates. the moderates want those votes on infrastructure today. the progressives are continuously holding it hostage and saying until we see movement on reconciliation, the $3.5 trillion, senator joe manchin really only wanting the top one, but until we see movement on that, they will not vote for infrastructure. jen psaki said he will not try to lay out a legislative agenda, this is more about cajoling the party. romaine: you are talking about the democrats, the party in power and congress. where are the republicans in this? anne-marie: they are not in the caucus, i can tell you that. republicans are really standing by and watching what the democrats do next. they are going to come a lot more hawkish when it comes to
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the debt ceiling, of course. they will not back the democrats who want to have a simple majority to move forward on suspending the debt ceiling. this is really where they are going to start coming into play. if there is anyway senator schumer could get mitch mcconnell to at least let there be a simple majority vote -- for the most part, republicans are watching the infighting with the democratic party and are using whatever they can to gear up for next year's midterms. sonali: what kind of timeline are we talking about here? anne-marie: if you and the president walks out of this meeting we will finally have one, but when it comes to a timeline in terms of infrastructure, speaker pelosi has promised to vote on the 27th of september. we are now in october. we do not have that vote yet. that has not come to the floor and it will not come to the floor until she has the votes. we will know the timeline when we see boats starting to happen.
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until then, it will be a lot of talk. romaine: we will let you go down, maybe you can yell out a couple of questions. annmarie hordern at the capitol in washington want to continue on this conversation here, and more importantly, about the tax side of this. aaron klein, senior fellow in economic studies at the brookings institute joining us now. i want to go through a couple of real fine points here, aaron, in regards to the president's tax plan, the tax proposals in this, which include in -- include a bump in the corporate tax rate, arise in minimum property tax, arise in --, the irs enforcement, that's a lot of stuff. >> a lot of what you are talking about was cut in the trump administration. when you are talking about rises or increases, that's where they
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were before. there were many years we cut taxes for the wealthy and promised society would be better off. we have racked up trons of dollars in debt and not seen the promised economic growth that these trump tax cuts or bush tax cuts have promised. you are returning taxes to a far more stable level to support the types of infrastructure and investment that the federal government has always made, the type of investors that productively grow our economy in the long run. katie: let's talk about capital gains, for example, and maybe even ending real estate breaks. people in the industry talk about needing to be done, but politically it's impossible. what is the likelihood of this finally getting done after so long, and do you think investors in particular are going to go down without a fight?
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>> we have to ask ourselves what is in an investor's best interest, a growing economy, productive society -- romaine: hang on, we have the president of the united states. let's listen in. we're just looking here at the president of the united states, coming out of that meeting here. we couldn't hear what he said, looks like some banter with some of the reporters trying to chase him down, getting a sense of what's going on before he came out. we were talking to aaron klein, senior fellow at the brookings institute. our apologies for interrupting your response, but maybe you can pick up where you were just talking about. >> it's not the first time joe biden has cut me off. i spent eight great years working in the u.s. senate. you go back in time, president ronald reagan in the 1986 tax
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act cut ordinary income. you have seen reductions in the tax people make on money, versus the tax they make on income work. how much more favorable should we tax profits or investments as opposed to labor? what you have seen over lack -- decades is decreases from making money on your money. this is in some way correlating with wealth disparity in this country. the question becomes at some point, i think it is prudent to raise the tax rate have on capital gains, which fundamentally is still taxed at a lower rate than labor. that's not fair to working americans, that they should pay higher in wage taxes than what the americans pay in investment taxes. katie: they have a razor thin
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majority. anne-marie was walking us through the infighting there between the moderates and the progressives. i'm curious which side you think ins out when it comes to this $3.5 trillion package that joe biden is pushing for? >> democrats don't have a vote to spare in the senate. they have one of the narrowest majorities in the house of representatives that this nation has seen. politically, the entire party, including the president, would struggle if they are not able to pass any part of their agenda and come together. when you ask yourself who is going to win or lose, fundamentally, they have the same scorecard. you see the economy doing better, are the key demographics and working-class americans were middle-class families doing better? we have to understand in the
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house of representatives, there is a constituency the representatives are responsible to, it's just the geographic district. you see a big difference between moderates and centrists in part because of who they are representing and what their politics are at home. romaine: we want to reiterate some comments the president did make walking out of that meeting. he said, we are going to get this done. annmarie hordern, our washington correspondent, pointed out, the president doesn't show up to these kinds of caucuses until a deal is ready to be made. i'm curious about some of the conversations we heard a few months ago about international cooperation here on raising taxes that conversation seemed to die down really fast.
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>> secretary yellen has been getting a lot of agreements in principle to try and stop the kind of erosion of income, this is the iphone dilemma. how much are these taxed in different places? this is the shell game that increasingly eroding our corporate tax base, but some work is needing to be done at home to give the legislative authority and the resources and the internal revenue service to go out and make sure people are paying their taxes. one of the different taxes you raised when you went through the litany was increased enforcement authority. it's important to note the tax gap, the amount people should be paying in taxes but aren't, has grown significantly over time. i just consider proper enforcement meaning people paying what they are supposed to.
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romaine: great to get your thoughts there, aaron klein, senior fellow at the brookings institute in economic studies. we will continue here on this conversation, particularly with regards to the democrats' plan to limit private equity, and this is the lifeblood of a lot of private equity out there. raising taxes will carry interest and disincentivize entrepreneurial risk. she would know, she knows a lot. the founder of -- venture fund, coming up next on bloomberg. ♪
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romaine: all right, today we are focused on fiscal spending and more importantly, how you pay for that fiscal spending. taxes, all things taxes, and people pointing out obscure provisions in the tax code. apparently this benefits venture capital startup technology, and a lot of folks out there say no, not quite so fast. it facilitates not only a lot of new business here, but contributes a lot to the economy here. this will set a sense of some estimated revenue, that democrats think they can raised by not -- the question, the benefits of what you gain by keeping it there are greater or lesser than anything you get out of revenue? that's the same question.
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i want to bring into this conversation shila nieves burney , over at zane venture fund. for folks that do not follow the tax code and know a lot about the tax code, how important are some of these qualified small-business stocks provisions. how important are they to startups? shila: thanks for having me. enter capital as a catalyst for change across the entire u.s. it's important for all of us, so i think people have some questions when they hear named hedge funds. they are talking about big names and not considering me folks like me, who are raising a diverse fund in this space, for underrepresented entrepreneurs.
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now, there is a tax being considered on wealth that would tax it as ordinary income. that would disenfranchise many of us who came into this based to not only create a shift in the market, but also address the wealth generation gap in this country. this is a huge opportunity for entrepreneurs. by putting taxes on top of taxes that are already in place, i think we are going to disincentivize a lot of the folks coming into this new opportunity of wealth generation. katie: let's say this still does go through and we see a change to carried interest. what would that mean for your business, for the zane venture fund, and how would you adjust to that? shila: what it would mean, so folks understand, we are not incentivized until we actually return the fund. i am basically working now off of what is a management fee, a very small fee, to go out and
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find the best deals, invest in those deals, and have great returns. by putting that extra layer of tax on their, you are disincentivize and folks because of that added tax. then you are hurting people like myself who are trying to grow this group of entrepreneurs and denying growth and job creation for fund managers like me, trying to create opportunities for underrepresented diverse entrepreneurs. katie: is there a difference when it comes to smaller and bigger firms? when people think of carried interest, they are not thinking about the smaller venture and private equity firms that are out there. they are thinking of these giant equity firms that have minted billionaire after billionaire. do you think there should be a different treatment among bigger and smaller firms, or do you think that this shouldn't be
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touched at all? katie: sure. i think -- shila: sure. i think there should be considerations depending on the amount of money under management. my fund is a $25 million fund. that is a very small fund, not a nano fund, above that, but it is not a $1 billion hedge fund or a $100 billion -- i have been in the room where these funds have been talked about. at $25 million fund is a blip on their radar. i think there should be some consideration on the types of fund. we are not talking a mega hedge fund or a private equity fund, this is a hedge -- a venture fund that quantifies growth and entrepreneurship in our country. romaine: with the general climate right now in washington, there is a lot of talk about how you make wealthy people contribute more and how you get corporations to contribute more to the tax base here. is there a parsing right now
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between some of the megacorporations and the mega-wealthy, and legitimately have paid some of their fair share, and the midsized venture funds out there that shouldn't be included in that mix? katie: i shila: shila: did -- shila: i do believe that, but i don't want to go back in time based on what is happening with new folks coming into the venture capital space. there's an understanding that a lot of these folks don't come from wealthy backgrounds, they don't come from these families that benefit some of the tax breaks in the past. we are in a nude -- new space of wealth generation, and i want to invest not only for the people who are part of my fund, but the people who are part of my team. romaine: your fund focuses on
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underrepresented entrepreneurs, is that right? shila: absolutely, yes. we do. the goal of that is that we have entrepreneurs building technologies that lead to a billion-dollar valuation. those same entrepreneurs will turn around and invest in other entrepreneurs, so we create the cyclical effective wealth generation we have been totally left out of, and now we have advantage. but we have an opportunity to invest in some of these companies that are coming up and help diverse entrepreneurs. katie: whenever this comes up in conversation, it tends to be talked about as a tax loophole. i'm curious how you would respond to that in pushback against those.
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shila: it's about how i am going to be able to make money. when you say it is a loophole, it's the only way i am incentivized to be able to raise the fund price. limited partners all have a [inaudible] but for the fund manager and myself, it's a small piece of that. i don't think it's an actual fact in this particular case. sonali: while we have you, the broader parts of the biden administration plan, if you look at entrepreneurship in america today, small businesses have gone online, right? entrepreneurship means starting a start up or some sort of digital enterprise, where venture becomes the main vehicle of financing. is there anything else you would want the biden administration to do to energize that area,
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especially for minority owned businesses? shila: sure. after george floyd's death, a lot of -- there was a wave of innovation, particularly in the black community, wanting to create opportunity not only for their communities, but for the broader country. adding some incentives -- i really hope the biden administration has a surge, an economic surgeon to entrepreneurship. there are so many opportunities to be able to support entrepreneurs. it's hard to build a company and not have the capital ready there for you. whether it's funding from venture capitals like myself, but we need to support diverse entrepreneurs coming into the space. romaine: it's great to get your thoughts. really insightful here. shila nieves burney, founder and
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general partner at zane venture fund. from new york, this is bloomberg. ♪
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♪ romaine: all right. taxes -- no one likes them, but they are probably going to go up. but what happens with regards to the entrepreneurial spirit? does it deter people from taking some of those risks? that's what we are trying to figure out, guys. katie: i think it's interesting that the founder of zane ventures said taxing larger funds differently than smaller funds is an interesting idea. sonali: and i'm interested to see how the debate around the corporate tax rate evolves. if you look at what it means for markets, bloomberg intelligence thinks that a change their -- change there code shave off
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the s&p 500. romaine: you survived three hours. will you be back on monday? anyway, that does it for "what'd you miss?" bloomberg technology is coming up next. have a great evening. this is bloomberg. ♪
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>> from the heart of our innovation, money, and power collided, in silicon valley and beyond, this is bloomberg technology with emily chang. emily: this is "bloomberg technology." tesla could be on the verge of reporting its biggest quarter ever, with record deliveries of its electric cars. what does it mean for the model s, x, 3, and y?


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